US dollar hits 11-year high against lek

TIRANA, Dec. 10 – The Albanian national currency lek continues losing ground against the US dollar but remains stable against Europe’s single currency. At 113.12 lek, the US dollar hit an eleven-year high this week, having appreciated by more than 10 percent since April 2014 when it traded at an average of 101.35 lek, according to the fixed Bank of Albania exchange rate.
The last time the US dollar was at a higher rate was back in November 2003 when it traded at an average of 115.52 lek.
Meanwhile, the Albanian currency remains stable against the Euro trading at 140.1 lek, which has been the average rate in the past four years.
Central bank data shows around 63 percent of business loans are in foreign currency of which 87.2 percent in euro and 12.8 percent in U.S. dollar. Lending in foreign currency to households accounts for 54 percent, with euro-denominated loans accounting for 97.8 percent and USD loans at 1.7 percent.
The national currency, lek, has lost around 15 percent during the past six years against the Euro, the main currency used in real estate lending. In November 2008, when the global crisis broke out, the Euro stood at an average of 123.29. Since then, it has been on a constant appreciation trend against Lek, climbing to a historic record high of 141.97 lek in June 2011 and remaining at an average of 140 lek since then.
The appreciation of the Euro against the Albanian lek is bad news for borrowers in Euro who have their income in lek and government’s external debt payments but good news for Albanian exporters who have been affected by Eurozone spillover impacts.